Question: for Determining the Optimal production and inventory plan to minimize the total cost? Including the fix cost, variable cost, production cost and inventory holding cost
for Determining the Optimal production and inventory plan to minimize the total cost? Including the fix cost, variable cost, production cost and inventory holding cost over the next month.
Define your decision variables clearly, formulate your model, include objective function and constrains. You do not need to solve it by hand.
Use dynamic programming to find the optimal production and inventory plan to minimize the total cost. State the decision clearly. Show all the procedures of the optimal solution.
Suppose now that the demand is not known, there is a shortage cost per unit considered, given the demand uncertainty. Describe the methodology in detail for determining the optimal production and inventory plan to minimize the expected total cost
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